††††† 902 KAR 4:040. Special Supplemental Nutrition Program for Women, Infants, and Children (WIC).

 

††††† RELATES TO: KRS Chapter 13B, 194A.050, 194A.505, 194A.990, 7 C.F.R. Part 246, 7 C.F.R. Part 278.6, 21 U.S.C. 802 sec. 102

††††† STATUTORY AUTHORITY: KRS 194A.050, 211.090(3), 7 C.F.R. Part 246, 42 U.S.C. 1786

††††† NECESSITY, FUNCTION, AND CONFORMITY: 42 U.S.C. 1786 and 7 C.F.R. Part 246, provide for grants for state operation of the Special Supplemental Nutrition Program for Women, Infants and Children (WIC). KRS 194A.050(1) authorizes the Cabinet for Health and Family Services to promulgate administrative regulations as necessary to qualify for the receipt of federal funds. This administrative regulation establishes the application and participation process for the Kentucky Special Supplemental Nutrition Program for Women, Infants and Children (WIC) for women, infants, children, and vendors, including the sanction and hearing processes.

 

††††† Section 1. Definitions. (1) "Alcohol" is defined in KRS 241.010(1).

††††† (2) "Alcoholic beverage" is defined in KRS 241.010(2).

††††† (3) "Authorized supplemental food" means a supplemental food authorized by the state or a local agency for issuance to a particular participant.

††††† (4) "Certifying professional authority" means a person authorized to determine eligibility and certify persons for the WIC Program, and is limited to the following:

††††† (a) A physician;

††††† (b) A nutritionist with a bachelorís degree;

††††† (c) A certified nutritionist;

††††† (d) A licensed dietitian;

††††† (e) A registered nurse;

††††† (f) A licensed practical nurse;

††††† (g) An advanced registered nurse practitioner; and

††††† (h) A physicianís assistant certified by the National Committee on Certification of Physicianís Assistants or certified by the state medical certifying authority.

††††† (5) "Compliance buy" means a covert, on-site investigation in which a representative of the WIC Program:

††††† (a) Poses as a participant;

††††† (b) Engages in a transaction involving one (1) or more food instruments; and

††††† (c) Does not reveal before, during, or after the visit, that he or she is a program representative.

††††† (6) "Contract price" means the price for a WIC food item negotiated between the state agency and the vendor.

††††† (7) "Dual participation" means simultaneous participation in the WIC Program and in:

††††† (a) One (1) or more WIC clinics; or

††††† (b) The Commodity Supplemental Food Program.

††††† (8) "Food package" means, for the purpose of participant access determination, three (3) food instruments issued to a participant, valid for the same time period.

††††† (9) "High risk vendor" means a vendor having a high probability of violating a WIC Program requirement, as identified by use of the following criteria:

††††† (a) High mean (high average cost per food instrument);

††††† (b) Low variance;

††††† (c) Percentage of WIC sales to food sales;

††††† (d) Food instruments redeemed outside of contract;

††††† (e) Pay exactly discrepancies; or

††††† (f) Food instruments redeemed outside the valid dates.

††††† (10) "Inventory audit" means an examination of food invoices or other proofs of purchase to determine if a vendor has purchased sufficient quantities of authorized supplemental food to provide to participants the quantities specified on food instruments redeemed by the vendor during a given period of time.

††††† (11) "Investigation" means a method used by the state agency to detect a WIC Program violation.

††††† (12) "Local agency" means an applying or participating WIC agency.

††††† (13) "Low variance" means the redemption of the same type of food instruments at the same price, or within a narrow price range.

††††† (14) "Merchandise" means goods or products.

††††† (15) "Participant" means:

††††† (a) A pregnant, breastfeeding, or postpartum woman, or an infant or child, who is receiving supplemental food or food instruments;

††††† (b) The breastfed infant of a breastfeeding woman who is receiving WIC Program benefits;

††††† (c) The parent or caretaker of an infant or child receiving a WIC benefit; and

††††† (d) The proxy for a person identified in paragraphs (a), (b), or (c) of this subsection.

††††† (16) "Participant violation" means an intentional, knowing act of a participant, as defined in this administrative regulation, that violates federal or state law governing the WIC Program.

††††† (17) "Positive compliance buy" means a compliance buy in which a violation of the WIC Program has occurred.

††††† (18) "Proxy" means a person designated by a woman participant, or by a parent or caretaker of an infant or child participant, to obtain and transact a food instrument or instruments, or to obtain a supplemental food or foods on behalf of a participant.

††††† (19) "Routine monitoring" means overt, on-site monitoring during which representatives of the WIC Program identify themselves to vendor personnel.

††††† (20) "Shelf price" means the price displayed on the vendorís display case, on the shelf, or on the food item.

††††† (21) "Staple food items" means meat, poultry, fish, bread, breadstuff, cereals, vegetables, fruit, vegetable and fruit juices, and dairy products, excluding items such as coffee, tea, cocoa, carbonated and uncarbonated beverages, condiments, and spices.

††††† (22) "State agency" means the Cabinet for Health and Family Services or itís designated representative.

††††† (23) "Trafficking" means the redemption of a food instrument or food instruments for cash.

††††† (24) "Vendor" means a sole proprietorship, partnership, cooperative association, corporation, or other business entity operating one (1) or more stores authorized through an agreement or contract with the state agency to participate by providing authorized supplemental foods to participants under a retail food delivery system. Each store operated by a business entity constitutes a separate vendor.

††††† (25) "Vendor authorization" means the process by which the state agency assesses, selects, and enters into an agreement or contract with a store that applies or subsequently reapplies to be authorized as a vendor.

††††† (26) "Vendor violation" means an intentional or unintentional act of a vendorís current owner, officer, manager, agent, or employee, with or without management knowledge, that violates the vendor agreement or federal or state law governing the WIC Program.

††††† (27) "WIC Program" or "WIC" means the Special Supplemental Nutrition Program for Women, Infants, and Children authorized by Section 17 of the Child Nutrition Act of 1966, 42 U.S.C. 1786 and administered pursuant to 42 U.S.C. 1786 and 7 C.F.R. Part 246.

 

††††† Section 2. Eligibility. To be certified as eligible to participate in the WIC Program, a person shall:

††††† (1) Be categorically eligible as follows:

††††† (a) A pregnant woman;

††††† (b) A postpartum woman, up to six (6) months after termination of pregnancy;

††††† (c) A breastfeeding woman, up to the infant's first birthday;

††††† (d) An infant, birth to one (1) year of age; or

††††† (e) A child, one (1) to five (5) years of age;

††††† (2) Provide proof of residence in the Commonwealth of Kentucky;

††††† (3) Provide proof of identity;

††††† (4) Provide proof of household income and meet the income criteria; and

††††† (5) Meet one (1) of the following nutritional risk criteria:

††††† (a) A detrimental or abnormal nutritional condition detectable by biochemical or anthropometric measurements, such as:

††††† 1. Anemia;

††††† 2. Underweight;

††††† 3. Overweight;

††††† 4. Abnormal pattern of weight gain in pregnant women;

††††† 5. Low weight gain in an infant; or

††††† 6. Stunting in an infant or child.

††††† (b) Other documented nutritionally related medical condition, such as:

††††† 1. Clinical signs of nutritional deficiency;

††††† 2. Metabolic disorder;

††††† 3. Pre-eclampsia in a pregnant woman;

††††† 4. Failure to thrive in an infant;

††††† 5. Chronic infection;

††††† 6. Alcohol or drug abuse or mental retardation in a woman;

††††† 7. Lead poisoning;

††††† 8. History in a pregnant woman of a high risk pregnancy or an associated factor such as:

††††† a. Smoking;

††††† b. Conception before sixteen (16) months postpartum;

††††† c. Low birth weight, premature birth, or neonatal loss;

††††† d. Adolescent pregnancy; or

††††† e. Current multiple pregnancy;

††††† 9. Congenital malformation in an infant or child; or

Infant born of a woman with:

††††† a. History of alcohol abuse;

††††† b. History of drug abuse; or

††††† c. Mental retardation;

††††† (c) A dietary deficiency that impairs or endangers health, such as an inadequate dietary pattern as assessed by:

††††† 1. A twenty-four (24) hour dietary recall;

††††† 2. Dietary history; or

††††† 3. Food frequency checklist;

††††† (d) A condition that predisposes a person to an inadequate nutritional pattern or nutritionally related medical condition, such as homelessness or migrancy or;

††††† (e) An infant under six (6) months of age if, during her pregnancy, the infant's mother:

††††† 1. Was a WIC Program participant; or

††††† 2. Met risk criteria;

††††† (6) A participant previously certified for the WIC Program shall be considered to be at nutritional risk in the next certification period if the certifying professional authority determines there is a possibility of regression in nutritional status without the supplemental foods.

 

††††† Section 3. Certification Periods. WIC Program benefits shall be based upon certifications established in accordance with the following time frames:

††††† (1) A pregnant woman shall be certified for the duration of her pregnancy and for up to six (6) weeks postpartum.

††††† (2) A postpartum woman shall be certified for up to six (6) months postpartum.

††††† (3) A breastfeeding woman shall be certified at intervals of approximately six (6) months, ending with the breastfed infant's first birthday.

††††† (4) An infant shall be certified at intervals of approximately six (6) months, except an infant under six (6) months of age shall be certified for a period extending up to the first birthday if the quality and accessibility of health care services is not diminished.

††††† (5) A child shall be certified at intervals of approximately six (6) months, ending with the end of the issuance month in which a child reaches the fifth birthday.

 

††††† Section 4. Priority System. Vacancies in the WIC Program shall be filled as they occur unless maximum participation has been reached. At that time, vacancies shall be filled by a priority system based upon the nutritional risk of the patient.

 

††††† Section 5. Food instruments shall be provided when participants are notified of certification.

 

††††† Section 6. Time Frames for Processing Applicants. Pregnant and breastfeeding women, infants, and migrants shall be screened and notified of WIC Program eligibility or ineligibility within ten (10) days. All other applicants shall be screened and notified of WIC Program eligibility or ineligibility within twenty (20) days.

 

††††† Section 7. Nutrition Education. (1) Nutrition education shall be made available to the participant and shall relate in a practical manner to the participantís nutritional needs, household situation, and cultural preferences.

††††† (2) Tobacco, drug and other harmful substance abuse information shall be provided to each participant.

††††† (3) Breastfeeding information and encouragement to breastfeed shall be provided to each pregnant participant, unless contraindicated.

 

††††† Section 8. Participant Abuse of the Program. (1) The cabinet or a local agency shall issue a written warning for the following suspected acts for which a complaint is received concerning a participant:

††††† (a) Purchasing unauthorized foods;

††††† (b) Redeeming food instruments at an unauthorized store;

††††† (c) Attempting to sell or exchange supplemental food or a WIC food instrument or food instruments with another individual, group, or vendor; or

††††† (d) Returning supplemental foods to a vendor for cash.

††††† (2) The cabinet or a local agency shall take the following specified action for an intentional act by a participant that is proven or documented:

††††† (a) Redeeming a food instrument before the "first day to use" or after the "last day to use."

††††† 1. First offense: written warning.

††††† 2. Second offense: monthly pickup of food instruments.

††††† 3. Third offense: one (1) month suspension.

††††† (b) Redeeming a food instrument which has previously been reported to the local agency as being lost or stolen and which has been replaced by another food instrument.

††††† 1. First offense: written warning.

††††† 2. Second offense: claim for amount of food instruments redeemed.

††††† (c) Purchasing unauthorized food.

††††† 1. First offense: written warning.

††††† 2. Second offense: one (1) month suspension.

††††† (d) Redeeming a food instrument at an unauthorized store.

††††† 1. First offense: written warning.

††††† 2. Second offense: one (1) month suspension.

††††† (e) Threatening physical abuse or verbal abuse of clinic or vendor staff.

††††† 1. First offense: written warning - if possible, another staff member may serve the participant.

††††† 2. Second offense: one (1) month suspension.

††††† (f) Physical abuse of clinic or vendor staff.

††††† 1. First offense: three (3) month suspension.

††††† 2. Second offense: three (3) month suspension.

††††† (g) Exchanging or selling supplemental food or a WIC food instrument with another individual, group, or vendor.

††††† 1. First offense: three (3) month suspension.

††††† 2. Second offense: three (3) month suspension.

††††† (h) Exchanging supplemental food or a WIC food instrument for credit, nonfood items, or supplemental food in excess of those listed on the food instrument.

††††† 1. First Offense: three (3) month suspension.

††††† 2. Second Offense: three (3) month suspension.

††††† (i) Dual participation in more than one (1) WIC Program or participation in both the WIC Program and the CSFP.

††††† 1. First offense: written warning and immediate termination from one (1) of the programs. The continuing WIC agency shall be chosen based upon the participantís residence or services.

††††† 2. Second offense: one (1) year disqualification and claim for food instruments redeemed.

††††† (j) Knowingly and deliberately making a false or misleading statement, or misrepresenting, concealing, or withholding a fact in order to obtain program benefits.

††††† 1. First offense: three (3) month disqualification and claim for improperly issued benefits.

††††† 2. Second offense: one (1) year disqualification and claim for improperly issued benefits.

††††† (3) Mandatory disqualification. Except as provided in subsections (4) and (5) of this section, a participant is disqualified for one (1) year if the state or local agency assesses:

††††† (a) A claim of $100 or more;

††††† (b) A claim for dual participation issued upon a second offense; or

††††† (c) A second or subsequent claim of any dollar amount.

††††† (4) A mandatory disqualification may not be imposed if, within thirty (30) days of receipt of the claim letter demanding repayment:

††††† (a) Full restitution is made;

††††† (b) A repayment schedule is agreed on; or

††††† (c) If the participant is an infant, child, or under age eighteen (18), the state or local agency approves the designation of a proxy.

††††† (5) A participant may be permitted to reapply for the WIC Program before the end of a mandatory disqualification period if:

††††† (a) Full restitution is made;

††††† (b) A repayment schedule is agreed upon; or

††††† (c) If the participant is an infant, child, or under age eighteen (18), the state or local agency approves the designation of a proxy.

††††† (6) The amount of a claim shall be determined by the value of the food instruments redeemed. If the claim is not paid, the participant shall be denied application to the WIC Program for the number of months of benefits which were used to calculate the claim amount.

††††† (7) A participant who repeatedly abuses the WIC Program shall be referred to the Office of the Inspector General for prosecution under KRS 194A.505.

††††† (8) Activities prohibited by KRS 194A.505 apply to participants, vendors, and agency personnel. Penalties in KRS 194A.990 apply to participants, vendors, and agency personnel who have violated KRS 194A.505.

 

††††† Section 9. Fair Hearing Procedures for Participants. (1) In accordance with 7 C.F.R. 246.9, a local agency shall inform a person, in writing, of the right to a fair hearing and the method by which a hearing may be requested at the time the person is:

††††† (a) Ineligible for the program;

††††† (b) Disqualified or suspended during a certification period; or

††††† (c) Issued a claim.

††††† (2) The first level of hearing for a person is with the local agency that has taken the adverse action against the person.

††††† (3) A person requesting a fair hearing shall contact the appropriate WIC agency within sixty (60) days from the date of the letter notifying the person of the adverse action. The hearing shall be held within three (3) weeks from receipt by the local agency of the hearing request. The local agency shall provide the person with at least ten (10) days advance written notice of the time and place of the hearing.

††††† (a) The local agency shall provide the person or the person's representative an opportunity to:

††††† 1. Review, prior to and during the hearing, documents and records presented to support the decision under appeal;

††††† 2. Be assisted or represented by an attorney or other persons, if desired;

††††† 3. Bring witnesses to testify;

††††† 4. Present oral or documentary evidence supporting their position and question or refute testimony or other evidence; and

††††† 5. Confront and cross-examine an adverse witness.

††††† (b) The hearing officer shall decide the case based upon the record of the hearing and the relevant statutory and regulatory provisions governing the WIC Program.

††††† (c) The basis of the decision shall be in writing and shall be the final binding decision of the local agency.

††††† (d) A decision shall be reached and written notification of the decision forwarded to the person no later than forty-five (45) days from receipt of the request for hearing.

††††† (4) A person may appeal the hearing officer's decision to the secretary within fifteen (15) days of the mailing date of the hearing decision notice, pursuant to Section 15 of this administrative regulation and KRS 13B.110.

 

††††† Section 10. Vendor Authorization Criteria. (1) Only a vendor authorized by the cabinet shall redeem a food instrument.

††††† (a) Each store operated by a business entity shall be authorized separately from other stores operated by the business entity.

††††† (b) Each store shall have a single, fixed location.

††††† (2) Food vendors shall be authorized in sufficient numbers and with distribution adequate to assure:

††††† (a) Participant convenience and access; and

††††† (b) Effective management of vendor review by the cabinet and the local agency.

††††† (3) In order to be an authorized WIC vendor, a vendor shall:

††††† (a) Provide information, including sales volume, requested by the state agency;

††††† (b) Stock, at all times, minimum inventory in accordance with the "Quantified Minimum Inventory Requirements" outlined in the WIC Information Manual for Vendor Applicants:

††††† 1. The stock shall be in the store or in the store's stockroom.

††††† 2. Expired foods shall not count towards meeting the minimum inventory requirement.

††††† 3. A pharmacy shall supply formula within forty-eight (48) hours of the WIC agency request.

††††† (c) As appropriate, be in compliance with the Kentucky Retail Market Sanitation Regulations, 902 KAR 45:005, and have a valid Retail Food Establishment or Retail Food Store Permit in the current owner's name;

††††† (d) Have prices commensurate with the area's authorized WIC vendors, compared according to policy, outlined in the WIC Information Manual for Vendor Applicants and the WIC Vendor Manual,;

††††† (e) Be in compliance with other Food and Nutrition Service Programs, as follows:

††††† 1. Not be disqualified or withdrawn by the United States Department of Agriculture from participation in another Food and Nutrition Service Program;

††††† 2. Not be denied application to participate in the Food Stamp Program;

††††† 3. Not be currently paying a civil money penalty to the Food Stamp Program; or

††††† 4. Not been assessed a civil money penalty for participant hardship by the Food Stamp Program and the disqualification period that would otherwise have been imposed has not expired.

††††† (f) Request authorization for a business whose primary purpose is to be a retail grocery.

††††† 1. A direct distribution outlet or wholesale food establishment shall not be eligible.

††††† 2. A vendor who derives more than fifty (50) percent of annual food sales revenue from the sale of food items on WIC food instruments shall not be eligible.

††††† 3. A retail grocery shall:

††††† a. Have a separate and distinct grocery department in a stationary location which stocks staple food items in addition to WIC approved foods; and

††††† b. Have fifteen (15) percent of gross sales in nontaxable food sales, excluding specialty items such as bakery goods for a bakery, or produce for a fruit and vegetable stand.

††††† 4. A dairy or home delivery grocery shall not be approved if it operates solely as a mobile operation.

††††† (g) Be open for business year round on a full-time basis at least eight (8) hours per day, six (6) days per week;

††††† (h) Be accessible to monitoring by state and federal officials without prior notice; and

††††† (i) Not be indebted to the WIC Program for an unpaid claim or a civil money penalty against a store owned or previously owned by the applying owner.

††††† (4) The WIC Program shall not authorize a vendor applicant if, during the last six (6) years, an applicantís current owner, officer or manager has been convicted of or had a civil judgment for:

††††† (a) Fraud;

††††† (b) Antitrust violation;

††††† (c) Embezzlement, theft, or forgery;

††††† (d) Bribery;

††††† (e) Falsification or destruction of records;

††††† (f) Making false statements or claims;

††††† (g) Receiving stolen property;

††††† (h) Obstruction of justice; or

††††† (i) Another act reflecting on the business integrity and reputation of the applicant, such as removal from other federal, or state programs.

††††† (5) The WIC Program shall not authorize a store that has attempted to circumvent a period of disqualification from the program. This includes a store that has undergone a sale or change of operation if the transaction involves the following parties:

††††† (a) The seller or transferor is an owner, operator, or manager currently suspended, sanctioned, or disqualified from the WIC or Food Stamp Program; and

††††† (b) The buyer or transferee is related to the seller by marriage or consanguinity within the fourth degree, or was a manager or employee of the seller at the time the sanction, suspension or disqualification was issued or the violation occurred.

††††† (6) A contract shall not be entered into with a vendor if the contract would cause a conflict of interest, real or apparent.

††††† (7) The WIC Program shall terminate a vendor contract if it determines the vendor or vendorís employee provided false information in connection with the vendor application.

 

††††† Section 11. Vendor Right to a Hearing. (1) A vendor shall be informed in writing of the right to a hearing and the method by which a hearing may be requested, for the following adverse actions:

††††† (a) Denial of application to participate in the program;

††††† (b) Disqualification; or

††††† (c) Other adverse action which affects participation during the agreement performance period.

††††† (2) In accordance with 7 C.F.R. 246.18, the following actions are not subject to appeal:

††††† (a) Expiration of an agreement with a vendor;

††††† (b) The WIC Program's determination of participant access; or

††††† (c) Disqualification from the WIC Program as a result of disqualification from the Food Stamp Program.

††††† (3) A vendor aggrieved by a qualifying adverse action shall request a hearing in accordance with Section 15 of this administrative regulation.

 

††††† Section 12. Vendor Violations and Sanctions. (1) In addition to any criminal penalty imposed pursuant to KRS 194A.990, the cabinet shall impose one (1) or more of the following civil sanctions for designated violations committed by a vendor, his employee or agent:

††††† (a)1. Vendor violation: failure to record actual purchase price on a WIC food instrument at the time of purchase.

††††† 2. Pattern of incidence and length of disqualification:

††††† a. First investigation. Two (2) positive compliance buys out of three (3) shall result in a written warning.

††††† b. Second investigation. Two (2) positive compliance buys out of three (3) shall result in a three (3) month disqualification.

††††† c. Third investigation. Two (2) positive compliance buys out of three (3) shall result in a six (6) month disqualification.

††††† (b)1. Vendor violation: failure to pay a claim made by the state agency. The state agency shall request payment as follows:

††††† a. Mail a letter to the vendor requesting payment by a specified date;

††††† b. If payment is not received, contact vendor by telephone requesting payment; and

††††† c. If payment is not received, mail a second letter by certified mail, return receipt requested.

††††† 2. Pattern of incidence and length of disqualification:

††††† a. First instance shall result in a three (3) month disqualification.

††††† b. Second instance shall result in a six (6) month disqualification.

††††† c. Third instance shall result in a one (1) year disqualification.

††††† (c)1. Vendor violation: failure to return the WIC vendor authorization stamp upon request. Before issuance of a sanction, the state agency shall contact the vendor by telephone to request the return of the stamp.

††††† 2. Pattern of incidence and length of disqualification: three (3) months shall be added to the previously established disqualification period.

††††† (d)1. Vendor violation: providing free merchandise to participants as an incentive to redeem food instruments at a particular vendor.

††††† 2. Pattern of incidence and length of disqualification:

††††† a. First investigation: Two (2) positive compliance buys out of three (3) shall result in a three (3) month disqualification.

††††† b. Second investigation: Two (2) positive compliance buys out of three (3) shall result in a six (6) month disqualification.

††††† c. Third investigation: Two (2) positive compliance buys out of three (3) shall result in a one (1) year disqualification.

††††† (e) A first offense shall be removed from a vendor's record if three (3) federal fiscal years elapse without recurrence of a violation described in paragraph (a), (b), (c), or (d) of this subsection.

††††† (f) 1. Vendor violation: convicted of trafficking in a food instrument or selling a firearm, ammunition, an explosive, or controlled substance, as defined in 21 U.S.C. 802 section 102, in exchange for a food instrument.

††††† 2. Pattern of incidence and length of disqualification: one (1) occurrence (one (1) time) of this violation shall result in a permanent disqualification.

††††† (g) 1. Vendor violation: trafficking in a food instrument or selling a firearm, ammunition, an explosive, or controlled substance, as defined in 21 U.S.C. 802 section 102, in exchange for a food instrument.

††††† 2. Pattern of incidence and length of disqualification: one (1) positive compliance buy shall result in a six (6) year disqualification.

††††† (h) 1. Vendor violation: sale of alcohol or alcoholic beverage or tobacco product in exchange for a food instrument.

††††† 2. Pattern of incidence and length of disqualification: one (1) positive compliance buy shall result in a three (3) year disqualification.

††††† (i) 1. Vendor violation: claiming reimbursement for the sale of an amount of a specific supplemental food item, which exceeds the vendorís documented inventory of that supplemental food item for a specific period of time.

††††† 2. Pattern of incidence and length of disqualification:

††††† a. An inventory audit for a thirty (30) day period which results in twenty-five (25) percent or more WIC sales than the documented inventory, shall result in a three (3) year disqualification; or

††††† b. An inventory audit for a ninety (90) day period, which results in ten (10) percent or more WIC sales than the documented inventory, shall result in a three (3) year disqualification.

††††† (j) 1. Vendor violation: charging a participant more for supplemental food than:

††††† a. A non-WIC customer is charged;

††††† b. The current shelf price; or

††††† c. The contract price.

††††† 2. Pattern of incidence and length of disqualification:

††††† a. Two (2) positive compliance buys out of three (3) shall result in a three (3) year disqualification if:

††††† (i) The vendor has exhibited a prior pattern of overcharging based upon routine monitoring visits which have resulted in two (2) letters for price discrepancies; or

††††† (ii) The vendor has exhibited a pattern of two (2) out of four (4) quarters of low variance in the prior federal fiscal year.

††††† b. The state agency shall:

††††† (i) Require a vendor who has received two (2) letters for price discrepancies during the federal fiscal year to receive training provided by the state agency.

††††† (ii) Notify a vendor who exhibits a pattern of low variance for two (2) or more quarters during the federal fiscal year.

††††† c. Three (3) positive compliance buys out of three (3) shall result in a three (3) year disqualification for a vendor who does not meet the conditions in clause a. of this subparagraph.

††††† (k) 1. Vendor violation: receiving, transacting or redeeming a food instrument by an unauthorized vendor through an authorized store.

††††† 2. Pattern of incidence and length of disqualification: two (2) positive compliance buys out of three (3) shall result in a three (3) year disqualification.

††††† (l) 1. Vendor violation: receiving, transacting or redeeming a food instrument by an unauthorized person, not a participant, proxy, or undercover investigator, as determined by an investigation by the Office of the Attorney General.

††††† 2. Pattern of incidence and length of disqualification: two (2) positive compliance buys out of three (3) shall result in a three (3) year disqualification.

††††† (m) 1. Vendor violation: charging for supplemental food not received by the participant, such as charging for one (1) food item or more listed on the food instrument but not purchased by the WIC participant.

††††† 2. Pattern of incidence and length of disqualification: three (3) positive compliance buys out of three (3) shall result in a three (3) year disqualification.

††††† (n) 1. Vendor violation:

††††† a. Providing credit, an IOU, a rain check, a due bill, or a store credit; or

††††† b. Providing a nonfood item other than cash, alcohol, tobacco, firearms, ammunition, explosives or controlled substances, as defined in 21 U.S.C. 802 section 102, in exchange for food instruments.

††††† 2. Pattern of incidence and length of disqualification: two (2) positive compliance buys out of three (3) shall result in a three (3) year disqualification.

††††† (o) 1. Vendor violation: providing an unauthorized food item or items in exchange for a food instrument.

2. Pattern of incidence and length of disqualification: five (5) positive compliance buys out of five (5) shall result in a one (1) year disqualification.

††††† (p) 1. Vendor violation: charging for supplemental food provided in excess of those listed on the food instrument.

††††† 2. Pattern of incidence and length of disqualification: five (5) positive compliance buys out of five (5) shall result in a one (1) year disqualification.

††††† (q) A vendor who has been disqualified from the Food Stamp Program shall be disqualified from the WIC Program for the same length of time as the Food Stamp Program disqualification.

††††† (r) A vendor who has been assessed a civil money penalty by the Food Stamp Program, as provided under 7 C.F.R. 278.6, shall be disqualified from the WIC Program for the same length of time for which the vendor would have been disqualified from the Food Stamp Program unless the WIC Program determines that disqualification would result in inadequate participant access, in which case a penalty shall not be assessed.

††††† (2)(a) Except for violations identified in subsection 1(b), (c), (f) through (i), (q) and (r) of this section, the state agency shall notify a vendor in writing if an investigation reveals a potential initial violation. The vendor shall be notified before another violation is documented unless the state agency determines that notifying the vendor would compromise an investigation.

††††† (b) The notification determination shall be made on a case by case basis.

††††† (c) A notification of a potential initial violation shall not be issued if:

††††† 1. The investigation is covert;

††††† 2. The investigator reports a potential initial violation during the course of the investigation; and

††††† 3. The vendor is identified to be a high risk vendor.

††††† (3) If multiple vendor violations are found during an investigation, the length of the disqualification shall be determined by the most serious violation.

††††† (4) If a vendor who has previously received two (2) or more of the mandatory sanctions designated in subsection (1)(f) through (p) of this section receives another sanction for a violation designated in subsection (1)(f) through (p) of this section, the third and all subsequent sanctions shall be doubled. A civil money penalty shall not be assessed for a third or subsequent sanction.

 

††††† Section 13. Participant Access Determination and Civil Money Penalty. (1) Except for a violation specified in Section 12(1)(g) of this administrative regulation, prior to disqualifying a vendor for a violation specified in Section 12 of this administrative regulation, the WIC Program vendor manager shall determine if disqualification of the vendor will result in inadequate participant access.

††††† (2) The determination and documentation of adequate participant access shall be made using the criteria provided in subsections (4) and (5) of this section.

††††† (3) Mileage shall be measured by automobile odometer.

††††† (4) There is adequate participant access, if:

††††† (a) There is another vendor within seven (7) miles of the vendor;

††††† (b) There is another vendor between the subject vendor and a health department service site, and the other vendor is within seven ††† (7) miles of the health department service site;

††††† (c) There is no geographic barrier, such as an impassable mountain or river, between the subject vendor and the next accessible vendor; or

††††† (d) The subject vendor is redeeming food instruments for formulas classified as special formulas and there is another vendor within seven (7) miles that can obtain the formula.

††††† (5) If five (5) or more total food packages are redeemed by the subject vendor in the calendar month period immediately preceding the issuance of a sanction letter, the WIC coordinator shall be consulted to determine if a special circumstance exists that will result in inadequate participant access.

††††† (6) If inadequate participant access is determined, a civil money penalty shall be assessed for a violation listed in Section 12 of this administrative regulation. The civil money penalty shall be calculated in accordance with the procedures outlined in the Vendor Manual.

††††† (7) The WIC Program shall negotiate an installment plan for the collection of a civil money penalty.

††††† (8) A vendor that fails to pay, partially pays, or fails to timely pay a civil money penalty, shall be disqualified for the length of time corresponding to the most serious violation.

 

††††† Section 14. Local Agency Right to a Hearing. A local agency aggrieved by an adverse action affecting participation may appeal the action in accordance with Section 15 of this administrative regulation.

 

††††† Section 15. Administrative Appeal. (1) A person appealing a local agency hearing officer's decision, or a vendor or local agency aggrieved by a decision of the cabinet to impose a sanction authorized by law, may file a written request for a hearing with the cabinet within (15) days after receipt of notice of the adverse action. The hearing shall be conducted in accordance with KRS Chapter 13B.

††††† (2) Within fifteen (15) days of a request for a hearing, the cabinet shall issue a notice of hearing.

††††† (3) A decision assessing the validity of the violation and sanction imposed shall be based upon the record of the hearing and the relevant statutory and regulatory provisions governing the WIC Program.

††††† (4) The final order of the cabinet shall be forwarded to the appellant within ninety (90) days from the date of receipt of the written request for hearing, unless the appellant waives this date in writing.

 

††††† Section 16. Incorporation by Reference. (1) The following material is incorporated by reference:

††††† (a) "WIC Information Manual for Vendor Applicants" May, 2005 edition; and

††††† (b) "WIC Vendor Manual" May, 2005 edition.

††††† (2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Department for Public Health, 275 East Main Street, Frankfort, Kentucky 40621, Monday through Friday, 8 a.m. to 4:30 p.m. (10 Ky.R. 259; Am. 402; eff. 9-7-83; 16 Ky.R. 234; 544; eff. 9-20-89; 2352; eff. 8-1-96; 26 Ky.R. 1452; 1799; eff. 4-12-2000; 28 Ky.R. 160; 629; eff. 9-10-2001; 32 Ky.R. 971; 1258; eff. 2-1-06.)